BILL NUMBER: AB 159	CHAPTERED  08/26/99

	CHAPTER   230
	FILED WITH SECRETARY OF STATE   AUGUST 26, 1999
	APPROVED BY GOVERNOR   AUGUST 25, 1999
	PASSED THE ASSEMBLY   AUGUST 16, 1999
	PASSED THE SENATE   JULY 15, 1999
	AMENDED IN SENATE   MAY 11, 1999
	AMENDED IN ASSEMBLY   MARCH 1, 1999

INTRODUCED BY   Assembly Member Floyd

                        JANUARY 15, 1999

   An act to amend Sections 11704.5 and 11713.1 of the Vehicle Code,
relating to vehicles.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 159, Floyd.  Vehicles:  dealers:  licenses.
   (1) Existing law requires every person, except as specified, who
applies for a vehicle dealer's license to take and successfully
complete a written examination.
   This bill would specify that this requirement applies to an
applicant for a dealer's license for the purpose of transacting sales
of used vehicles on a retail or wholesale basis only and would
expressly exclude, in addition to persons who are currently excluded,
an applicant for an automobile dismantler's license, an applicant
for a motorcycle-only dealer's license or an employee of that dealer,
and an applicant for a trailer-only dealer's license or an employee
of that dealer.
   (2) Under existing law, it is unlawful for a vehicle dealer, as
defined, to, among other things, advertise the total price of a
vehicle, including all costs to the purchaser at the time of sale,
except for specified costs, including fees for a certification of
compliance or noncompliance not exceeding $45.
   This bill would recast these exclusions by excluding from the
total advertised price of the vehicle, emission testing fees, not
exceeding $50, and the actual fees changed for the certificates
pursuant to statute.  This bill would make conforming changes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 11704.5 of the Vehicle Code is amended to read:

   11704.5.  (a) Except as provided in subdivision (d), every person
who applies for a dealer's license pursuant to Section 11701 for the
purpose of transacting sales of used vehicles on a retail or
wholesale basis only shall be required to take and successfully
complete a written examination prepared and administered by the
department before a license may be issued.  The examination shall
include, but need not be limited to, all of the following laws and
subjects:
   (1) Division 12 (commencing with Section 24000), relating to
equipment of vehicles.
   (2) Advertising.
   (3) Odometers.
   (4) Vehicle licensing and registration.
   (5) Branch locations.
   (6) Offsite sales.
   (7) Unlawful dealer activities.
   (8) Handling, completion, and disposition of departmental forms.
   (b) Prior to the first taking of an examination under subdivision
(a), every applicant shall successfully complete a preliminary
educational program of not less than four hours.  The program shall
address, but not be limited to, all of the following topics:
   (1) Chapter 2B (commencing with Section 2981) of Title 14 of Part
4 of Division 3 of the Civil Code, relating to motor vehicle sales
finance.
   (2) Motor vehicle financing.
   (3) Truth in lending.
   (4) Sales and use taxes.
   (5) Division 12 (commencing with Section 24000), relating to
equipment of vehicles.
   (6) Advertising.
   (7) Odometers.
   (8) Vehicle licensing and registration.
   (9) Branch locations.
   (10) Offsite sales.
   (11) Unlawful dealer activities.
   (12) Air pollution control requirements.
   (13) Regulations of the Bureau of Automotive Repair.
   (14) Handling, completion, and disposition of departmental forms.

   (c) Instruction may be provided by generally accredited
educational institutions, private vocational schools, correspondence
institutions, and educational programs and seminars offered by
professional societies, organizations, trade associations, and other
educational and technical programs that meet the requirements of this
section or by the department.
   (d) This section does not apply to any of the following:
   (1) An applicant for a new vehicle dealer's license or any
employee of that dealer.
   (2) A person who holds a valid license as a dealer at the time of
application.
   (3) A person who held a license as a dealer during the 36 months
immediately preceding the date of the receipt of the application by
the department.
   (4) A person who holds a valid license as an automobile
dismantler, an employee of that dismantler, or an applicant for an
automobile dismantler's license.
   (5) An applicant for a motorcycle only dealer's license or any
employee of that dealer.
   (6) An applicant for a trailer only dealer's license or any
employee of that dealer.
  SEC. 2.  Section 11713.1 of the Vehicle Code is amended to read:
   11713.1.  It is a violation of this code for the holder of any
dealer's license issued under this article to do any of the
following:
   (a) Advertise any specific vehicle for sale without identifying
the vehicle by either its vehicle identification number or license
number.
   (b) Advertise the total price of a vehicle without including all
costs to the purchaser at time of sale, except taxes, vehicle
registration fees, emission testing fees not exceeding fifty dollars
($50), actual fees charged for certificates pursuant to Section 44060
of the Health and Safety Code, finance charges, and any dealer
document preparation charge.  The dealer document preparation charge
shall not exceed forty-five dollars ($45).
   (c) Exclude from the newspaper display advertisement of a vehicle
for sale that there will be added to the advertised total price at
the time of sale, charges for sales tax, vehicle registration fees,
the fee charged by the state for the issuance of any certificate of
compliance or noncompliance pursuant to any statute, finance charges,
and any dealer document preparation charge.
   For purposes of this subdivision, "newspaper display advertisement"
means any advertisement in a newspaper which is two or more
newspaper columns in width or one newspaper column in width and more
than seven inches in length.
   (d) Represent the dealer document preparation charge or
certificate of compliance or noncompliance fee, as a governmental
fee.
   (e) Fail to sell a vehicle to any person at the advertised total
price, exclusive of taxes, vehicle registration fees, the fee charged
by the state for the issuance of any certificate of compliance or
noncompliance pursuant to any statute, finance charges, mobilehome
escrow fees, the amount of any city, county, or city and county
imposed fee or tax for a mobilehome, and any dealer document
preparation charge, which charges shall not exceed forty-five dollars
($45) for the document preparation charge and not to exceed fifty
dollars ($50) for emission testing plus the actual fees charged for
certificates pursuant to Section 44060 of the Health and Safety Code,
while the vehicle remains unsold, unless the advertisement states
the advertised total price is good only for a specified time and the
time has elapsed.
   (f) (1) Advertise for sale, sell, or purchase for resale any new
vehicle of a line-make for which the dealer does not hold a
franchise.
   (2) This subdivision does not apply to any transaction involving
any of the following:
   (A) A mobilehome.
   (B) A recreational vehicle as defined in Section 18010 of the
Health and Safety Code.
   (C) A commercial coach, as defined in Section 18001.8 of the
Health and Safety Code.
   (D) An off-highway motor vehicle subject to identification as
defined in Section 38012.
   (E) A manufactured home.
   (F) A new vehicle that will be substantially altered or modified
by a converter prior to resale.
   (G) A commercial vehicle with a gross vehicle weight rating or
more than 10,000 pounds.
   (H) A vehicle purchased for export and exported outside the
territorial limits of the United States without being registered with
the department.
   (g) Sell a park trailer, as specified in subdivision (b) of
Section 18010 of the Health and Safety Code, without disclosing in
writing to the purchaser that a park trailer is required to be moved
by a transporter or a licensed manufacturer or dealer under a permit
issued by the Department of Transportation or a local authority with
respect to highways under their respective jurisdictions.
   (h) Advertise free merchandise, gifts, or services provided by a
dealer contingent on the purchase of a vehicle.  The term "free"
includes merchandise or services offered for sale at a price less
than the seller's cost of the merchandise or services.
   (i) Advertise vehicles, and related goods or services, at a
specified dealer price, with the intent not to supply reasonably
expectable demand, unless the advertisement discloses the number of
vehicles in stock at the advertised price.  In addition, whether or
not there are sufficient vehicles in stock to supply a reasonably
expectable demand, when phrases such as "starting at," "from,"
"beginning as low as," or words of similar import are used in
reference to an advertised price, the advertisement shall disclose
the number of vehicles available at that advertised price.
   For purposes of this subdivision, in any newspaper advertisement
for a vehicle that is two model years old or newer, the actual phrase
that states the number of vehicles in stock at the advertised price
shall be (1) printed in a type size that is at least equal to
one-quarter of the type size, and in the same style and color of
type, used for the advertised price, however, in no case shall the
phrase be printed in less than 8-point type size, and (2) be
disclosed immediately above, below, or beside the advertised price
without any intervening words, pictures, marks, or symbols.
   The disclosure required by this subdivision is in addition to any
other disclosure required by this code or any regulation regarding
identifying vehicles advertised for sale.
   (j) Use the term "rebate" or similar words such as "cash back" in
advertising the sale of a vehicle unless the rebate is expressed in a
specific dollar amount and is in fact a rebate offered by the
vehicle manufacturer or distributor directly to the retail purchaser
of the vehicle or to the assignee of the retail purchaser.
   (k) Require a person to pay a higher price for a vehicle and
related goods or services for receiving advertised credit terms than
the cash price the same person would have to pay to purchase the same
vehicle and related goods or services.  For the purpose of this
subdivision, "cash price" has the meaning as defined in subdivision
(e) of Section 2981 of the Civil Code.
   (l) Advertise a guaranteed trade-in allowance unless the guarantee
is provided by the manufacturer or distributor.
   (m) Misrepresent the authority of a salesperson, representative,
or agent to negotiate the final terms of a transaction.
   (n) (1) Use the terms  "invoice," "dealer's invoice," "wholesale
price," or similar terms that refer to a dealer's cost for a vehicle
in an advertisement for the sale of a vehicle or advertise that the
selling price of a vehicle is above, below, or at either of the
following:
   (A) The manufacturer's or distributor's invoice price to a dealer.

   (B) A dealer's cost.
   (2) This subdivision does not apply to either of the following:
   (A) Any communication occurring during face-to-face negotiations
for the purchase of a specific vehicle if the prospective purchaser
initiates a discussion of the vehicle's invoice price or the dealer's
cost for that vehicle.
   (B) Any communication between a dealer and a prospective
commercial purchaser that is not disseminated to the general public.
For purposes of this subparagraph, a "commercial purchaser" means a
dealer, lessor, lessor-retailer, manufacturer, remanufacturer,
distributor, financial institution, governmental entity, or person
who purchases 10 or more vehicles during a year.
   (o) Violate any law prohibiting bait and switch advertising,
including, but not limited to, the guides against bait advertising
set forth in Part 238 (commencing with Section 238) of Title 16 of
the Code of Federal Regulations, as those regulations read on January
1, 1988.
   (p) Make any untrue or misleading statement indicating that a
vehicle is equipped with all the factory installed optional equipment
the manufacturer offers, including, but not limited to, a false
statement that a vehicle is "fully factory equipped."
   (q) Affix on any new vehicle a supplemental price sticker
containing a price that represents the dealer's asking price which
exceeds the manufacturer's suggested retail price unless all of the
following occur:
   (1) The supplemental sticker clearly and conspicuously discloses
in the largest print appearing on the sticker, other than the print
size used for the dealer's name, that the supplemental sticker price
is the dealer's asking price, or words of similar import, and that it
is not the manufacturer's suggested retail price.
   (2) The supplemental sticker clearly and conspicuously discloses
the manufacturer's suggested retail price.
   (3) The supplemental sticker lists each item which is not included
in the manufacturer's suggested retail price, and discloses the
additional price of each item.  If the supplemental sticker price is
greater than the sum of the manufacturer's suggested retail price and
the price of the items added by the dealer, then the supplemental
sticker price shall set forth that difference and describe it as
"added mark-up."
   (r) Advertise any underselling claim, such as "we have the lowest
prices" or "we will beat any dealer's price," unless the dealer has
conducted a recent survey showing that the dealer sells its vehicles
at lower prices than any other licensee in its trade area and
maintains records to adequately substantiate the claims.  The
substantiating records shall be made available to the department upon
request.
   (s) Advertise any incentive offered by the manufacturer or
distributor if the dealer is required to contribute to the cost of
the incentive as a condition of participating in the incentive
program, unless the dealer discloses in a clear and conspicuous
manner that dealer participation may affect consumer cost.
   For purposes of this subdivision, "incentive" means anything of
value offered to induce people to purchase a vehicle, including, but
not limited to, discounts, savings claims, rebates, below-market
finance rates, and free merchandise or services.
   (t) Display or offer for sale any used vehicle unless there is
affixed to the vehicle the Federal Trade Commission's Buyer's Guide
as required by Part 455 of Title 16 of the Code of Federal
Regulations.
   (u) Fail to disclose in writing to the franchisor of a new motor
vehicle dealer the name of the purchaser, date of sale, and the
vehicle identification number of each new motor vehicle sold of the
line-make of that franchisor, or intentionally submit to that
franchisor a false name for the purchaser or false date for the date
of sale.
   (v) Enter into a contract for the retail sale of a motor vehicle
unless the contract clearly and conspicuously discloses whether the
vehicle is being sold as a new vehicle or a used vehicle, as defined
in this code.
   (w) Use a simulated check, as defined in subdivision (a) of
Section 22433 of the Business and Professions Code, in an
advertisement for the sale or lease of a vehicle.
   (x) Fail to disclose, in a clear and conspicuous manner in at
least 10-point bold type on the face of any contract for the retail
sale of a new motor vehicle that this transaction is, or is not,
subject to a fee received by an autobroker from the selling new motor
vehicle dealer, and the name of the autobroker, if applicable.

